by Jerry Gordon and Mike Bates (March 2012)
Israeli Prime Minister Netanyahu meets President Obama in Washington on March 5th for discussions. There is yet another emerging impasse on which option to pursue with a truculent nuclear Iran and concerns about the rise of an Islamist alliance in Syria should the brutal Assad regime be toppled.
That Islamist alliance ringing Syria and supported by the Obama Administration, includes Turkey, Qatar, and Saudi Arabia. The main Syrian opposition group, the Syrian National Council (SNC), while nominally including Kurds, Christians and other minorities has prominent Muslim Brotherhood leadership. The Friends of Syria meeting in Tunis on February 25th with more than 60 delegations voiced “legitimacy” but refrained from full recognition of the SNC. Britain’s Foreign Secretary Hague endorsed the SNC. The Friends of Syria Tunis gathering ended with calls for a possible international peacekeeper force and tougher sanctions against the Assad regime in Damascus. Both Russia and China were condemned by Secretary of State Clinton at the Tunis conference for vetoing UN Security Council Resolutions condemning the Assad Regime for its brutal repression. Meanwhile, a majority of Syria’s diverse population sat on the sidelines cowed by the brutality of the Assad Regime. The Free Syria Army, composed of mainly Sunni defectors from the Syrian Army, has the endorsement of Ayman al-Zawahiri of al Qaeda. Al- Zawahiri ascended to the leadership of al Qaeda following the assassination of Osama Bin Laden last May. Al-Qaeda cadres from both Libya and Iraq are reported to have entered Syria. Qatar, which supplied weapons to the Libyan militias, has been reported to be supplying weapons to insurgents in southeastern Syria via Jordan. Presently, the repressive Assad campaign is wreaking havoc daily on the embattled city of Homs. Estimated casualties are approaching 7,000 after a nearly year-long effort by the Alawite minority led Syrian military to stifle open revolt. Moreover, there is rising concern in official Washington of possible use of Syria’s vast caches of unconventional chemical and biological warfare weapons against its people and the threat of their possible transfer to terrorist groups in neighboring countries if the Assad regime is toppled.
There is major concern in both Israel and America that the Obama Administration may have condoned support for Muslim Brotherhood leadership in Egypt and the Kingdom of Jordan where King Abdullah II has engaged in a risky dialogue with the Islamic Action Front (IAF). The IAF is a Muslim Brotherhood party with Salafist supporters. There are daily protests in Tahrir Square in Cairo alternating between marginalized secularists demonstrating against the Muslim Brotherhood on the one hand and the Muslim Brotherhood protesting the Supreme Council of the Armed Forces (SCAF). SCAF is led by Field Marshal Mohamed Hussein Tantawi, a colleague of deposed former Egyptian strongman, Hosni Mubarak. Salafists in Egypt have been perpetrating pogroms against Christian Copts. Libya is in disarray in the wake of the collapse and murder of the late dictator Muammar Gaddafi and appears to have devolved into tribal warfare. A major concern in Libya is the absence of control over Islamist militias, including former al Qaeda fighters, and their sophisticated weaponry, some of which has appeared recently in Gaza. Tunisia, which sparked the Arab Spring in December 2010, has an Islamist leader Rashid al-Ghannouchi. He is President of the Tunisian Ennahda Party which formed an alliance with the Muslim Brotherhood. Yemen’s strong man Ali Abdullah Saleh has reached a compromise with the opposition who has assented to his number two assuming the top leadership position. Yemen’s al Qaeda in the Arabian Peninsula may have been marginalized with the assassination of American-born radical Imam, Anwar Al-Awlaki in September 2011.
Overarching all of these developments has been the question of whether Israel would undertake unilateral action against Iran’s nuclear facilities. Both Israeli and US assessments generally agree that the nuclear denouement will soon be at hand. Announcements by the Islamic Republic late in February may indicate that Iran has transferred stocks of low enriched uranium to Fordow facility deep in a mountain near the holy city of Qom. The resulting fissile material could be used for assembly of an estimated four or more bombs. In which case, Israeli Minister of Defense Ehud Barak has commented that the Islamic Republic may shortly reach the “zone of immunity” where military action might not be able to cause sufficient damage to halt the Iranian nuclear program. One independent assessment made by Israeli investigative journalist Ronen Bergman (see our interview with him published in the February 2012 NER) suggested that the Netanyahu government might be on the verge of making a decision to attack Iran’s nuclear facilities. Meanwhile both Defense Minister Barak and PM Netanyahu have indicated that the decision has yet to be taken. US Chairman of the Joint Chiefs of Staff, Gen. Dempsey, made a trip to Israel to consult with IDF and senior security officials. Gen. Dempsey has publicly cautioned Israel that such action would be inadvisable. Instead, Israel, the US and the EU would like to see whether recently adopted tougher sanctions against Iran’s Central Bank, a moratorium against purchases of Iranian oil by EU members and denial of access to the international payments system would disrupt Iran’s economy halting the enrichment process. The Obama Administration does not want military action in Iran to delay economic progress in the US in the midst of a Presidential election campaign. It also holds out for possible dialogue with the Islamic Republic. Meanwhile the P5+1 (Permanent Members of the UN Security Council plus Germany) were poised to hold discussions with Iranian officials after receipt of a letter from President Ahmadinejad.
Many observers feel that despite Iran’s economy being in virtual free fall with rapidly escalating inflation and a devaluing currency, the Supreme Ruler, Ayatollah Khamanei, and President Ahmadinejad will not be deterred in achieving their nuclear objectives. They declared their possession of nuclear technology for alleged peaceful means,”non-negotiable.” Evidence of that stiffening stance came in late February. IAEA inspectors abruptly left Iran following denial of entry to a leading military research site at Parchin involved with possible explosive testing. This was followed by reports that enrichment of transferred uranium may have been accelerated at both Natanz and the deep underground enrichment facility of Fordow near Qom. These developments may have mooted the renewed P5+1 discussion with nuclear Iran abandoned over a year ago. Reports released on February 23rd by the Washington, DC based Institute for Science and International Security appear to have confirmed the creation of a parallel Military Nuclear Research Program at Iran’s Physics Research Center. Further, the Islamic Regime had warned about reprisals against Israel, the EU and America. Evidence of their intentions was reflected in the dispatch of Qod Force units who attempted bombings of Israeli embassies and personnel in New Delhi, Tbilisi and Bangkok. There are indications that Iran might unleash attacks in the US against American Jewish institutions and military personnel as possible reprisals in the event of an attack on their nuclear facilities.
Against this background “Your Turn” host Mike Bates, of radio station 1330AMWEBY of Pensacola, Florida, Senior Editor Jerry Gordon of the New English Review, Jonathan Schanzer, Vice President of Research and Emanuele Ottolenghi, Senior Fellow of Washington, DC- based Foundation for the Defense of Democracies held a radio round table discussion.
Mike Bates: Good afternoon and welcome to Your Turn. This is a special edition of Your Turn, one of our international roundtable discussions. With me in the studio is, Jerry Gordon, Senior Editor of the New English Review and its blog “The Iconoclast”, also the author of The West Speaks, an upcoming book. When is that going to be out Jerry?
Jerry Gordon: It should be published on April the first.
Bates: I look forward to it. Well welcome back to Your Turn and joining us by telephone is Jonathan Schanzer, V.P. of Research at the Foundation for Defense of Democracies. Jonathan, welcome to Your Turn.
Jonathan Schanzer: Thanks so much.
Bates: All right, we'll discuss what is happening in the Middle East with the Arab Spring, what's happening in Syria, certainly a lot of chaos there and Hamas as well, what's happening in that world.
Gordon: Jon, the Arab Spring looks to be in tatters. What is your assessment of the Arab Middle East?
Schanzer: Well Jerry, it is actually an interesting thing. I just returned from a ten day fact-finding mission in Israel and I had a chance to talk with a number of Israeli officials about how Israel views the Arab Spring. I think it should come as no shock to anyone that it is viewed with a deep suspicion and in fact a lot of negativity. The way it is described almost to a “t” by everyone I talked to and this includes academics, policy professionals, and Members of the Knesset. They all said this is not an Arab Spring, it's an Arab Winter. I took this at face value but after coming back from the trip, taking a deeper assessment, reflecting on what I saw, I actually believe that we maybe be seeing something very rare in Israel and that is group think. I actually believe that the Israelis may be a little off here, and here's why. When you take a look at each country you certainly see a rise of Islamists. You see the rise in the Muslim Brotherhood. The populist sentiment is growing, the anti-Israel sentiment is growing, and the anti-American sentiment is growing. And all of these things look, obviously, very dire. But, when you dig deeper, you begin to realize that a lot of these countries don't pose the threat that you think they might. I mean, for example, in Egypt, everybody's been saying that this is a Muslim Brotherhood standoff with the military and that ultimately the brotherhood has to win. What I found is that after polling some of my colleagues who study Egypt and doing some homework, it is actually not really a Brotherhood issue. This is a power struggle taking place between the armed forces and the Mukhabarat, the Internal Security Services in Egypt. The good news is that both of those actors are beholden to the United States; they rely on us for aid, military assistance. Even with the Muslim Brotherhood gaining a foothold in the government, it doesn't mean that the true power brokers are going to allow for a collapse of the Camp David accords. In Tunisia, people are saying that it is a radical Islamist regime. I think it bears noting that Tunisia is basically a suburb of Paris. It never posed a threat to Israel and I still don't believe that it will. Then people are saying, well, we've got Yemen and that's going to turn into a terrorist basket case. Well, news flash, it already is a terrorist basket case and it's been very difficult for the Yemenis to penetrate Israeli society. Across the board, one after the other, you find that this is not all really bad news. What you thought was really bad news really isn't. The one area where I would even say that it's potentially terrific news is in Syria. We are seeing a civil war that is unfolding over there and it is bound to bring the collapse of Bashar al-Assad's regime. What people are saying is: what's going to happen when Syria falls – you are going to have the rise of the Muslim Brotherhood or a Salafist faction and to that I ask what is the worst that could happen? The worst is that you have a regime that comes to power that is supported by Iran and it provides support to groups like Hamas and Hezbollah and perhaps provides assistance to the insurgencies in Iraq and Afghanistan. What I've just described is the regime that is already in place. And so what I would say is that Israel's security situation is probably at a status quo, as opposed to heading into some sort of a dark and scary winter. It's probably where it was before. The difference here is that the Israelis are now keenly aware of the fact that the Arab countries around them, the Arab populations around them, are not accepting of Israel as a Jewish state and that Islamism is on the rise. It always has been, but now the Israelis have to look at it square in the eye and figure out how to work with it. To a certain extent Israel is safer for having realized the dangers around them. This was my take after ten days on the ground in Israel.
Gordon: Jon, conspicuous by its absence in your perspective is the Kingdom of Jordon. There are some developments in the Kingdom that are disturbing. What is happening next door to Israel?
Schanzer: Absolutely. And actually, that would be the one dark lining to the silver cloud that I just gave you. I have been writing about Jordan for several months. I wrote about it for the Wall Street Journal and for the Weekly Standard. If a true, free, and fair election were to be held tomorrow in Jordan, the Muslim Brotherhood would win. It goes by the name of the Islamic Action Front, and the last time there was a free and fair election in the late 1980's, it won by a large margin. I believe that this is a very dangerous combination. If the opposition wins out in Jordan in a free and fair election, it will be a Muslim Brotherhood dominated parliament in a country that is 80 percent Palestinian. King Abdullah II will have lost his mandate and this is obviously bad news because there is a peace treaty between Israel and Jordan. The difference there is that the United States doesn’t have a lot of leverage. For example, in Egypt we have institutions that we have been building up over time. We have provided the Egyptian military with intelligence, equipment and funding. In Jordan we don't have the same leverage. The donations that we give in aid to Jordan are just not that significant. I don't even know if it would matter in a place like Jordan. It is, I think, a dangerous place right now in the Middle East and it is getting very little attention. There was an article that came out just recently in the New York Times talking about the potential problems that are rearing their head in Jordan, but I don't think it's gotten enough attention.
Bates: Jonathan, how much has the United States done in the Arab Spring, either overtly or covertly? Are we responsible for some of this?
Schanzer: Well, we are responsible for some of it. Part of this dates back 30 years ago when we entered into these relationships with Arab dictators that we should never have entered into in the first place. We entered into transactional not transformational relationships. We did not push them to democratize and treat their own people with dignity. As a result, we are being held responsible. It looks as if we have been complicit in what eventually amounted to war crimes in these countries. We are partially responsible for the problems that arose there. I would also say that after President Obama came to office he did something that I think was extremely ill advised. He zeroed out a number of the democracy programs that we had put in place during the Bush Administration, part of what was then seen as the Bush doctrine. Obviously, Obama came to power on promises of being the anti-Bush candidate. He basically eradicated whatever foundations we had tried to establish in the Arab world in order to foster democracy in the last ten years. I would further say that our policy has also created some confusion among our allies and our enemies alike. What we have done is rushed to help topple our friends. We rushed to help topple Hosni Mubarak. We rushed to topple Moammar Gadhafi, who by the way wasn't a terrific friend of the United States, but he was a nominal ally. The message to our friends in the region was if you are experiencing an uprising, we will help topple you. Meanwhile, what you have in Syria is an uprising against Bashar al-Assad who is a state sponsor of terrorism and has been sponsoring Hamas and Hezbollah, and working with Iran. Assad’s Syria had links to all sorts of other terrorist organizations and we refuse to topple him. We allowed him to cling to power stubbornly and we don't do anything about it. The messages that we've been sending to the Arab world for many years have been mixed ones at best. Right now our policy is one that is utterly confusing to them. They are angry with us for not backing the right people and toppling the wrong ones.
Bates: Well there have been calls most recently from Senator John McCain that we ought to consider arming the Syrian rebels. Do you think that would be a good idea?
Schanzer: I don't know if arming them is the right thing, but providing them with support in some other ways I think would be very critical. That might be some form of material support or at least funding. The idea of putting weaponry, especially high tech weaponry, into Syria is a bad idea when you worry about what happens the day after Assad falls. You look at Libya right now and it lacks the institutions to sustain the kind of weapons that flowed into that country. Syria is even worse because it is in a critical part of the region. It would be a direct threat to Israel. There would be potential spillover into places like Iraq. So we need to be very careful what we do there in terms of arming the opposition. Certainly we ought to be getting out in front of this and supporting the opposition's calls to have Assad toppled, doing whatever we can, stopping short of weaponry, to make sure that the policy trends go in the right direction.
Gordon: Jon, you mentioned earlier that what is going on in Egypt is a power struggle between the Supreme Counsel of the Armed Forces and the Secret Police there. Is that what is behind the detention of the 19 Americans who are involved in democracy development there?
Schanzer: It is unclear. The Egyptians have said that they have real evidence about this. Obviously, the U.S. Government has said that this is all a fabrication. This has clearly created tensions between the provisional government in Egypt and the United States. It has given a lot of people reason to say that it may be time to start scaling back on the funding that we've been providing Egypt. I wish I could tell you exactly what is happening there. What I can say is that with the protests we are seeing in the streets in Egypt every day, it seems that the public has new grievances with the government, or targeting the armed forces. Some days it's against the Muslim Brotherhood itself. The reason why this has been such a moving target is you have these two very important power brokers challenging each other on the world stage. That has been happening behind the scenes. No one is talking about it, but it certainly what has been happening in Egypt.
Bates: Jerry, let me ask you a question regarding Syria and what is happening. I've heard that there is a connection between the Syrian opposition and the Fort Hood shootings. Is there one?
Gordon: That is correct. It is an after the fact connection. The chairperson of the Syrian National Council, the leading opposition group, is a gentleman by the name of Louay Safi. Louay Safi is in fact a member of the Muslim Brotherhood and was involved with one of their institutions in Northern Virginia called the International Islamic Institute of Thought. The Triple I.T. as it's known. He also is the author of an infamous quasi fatwa which said that anyone who leaves Islam by personal choice is considered a traitor and subject to corporeal punishment which can range all of the way up to death. Here we have essentially an articulate person head of the political chair of the Syrian National Counsel. Jon, what does that really tell us?
Schanzer: Well it says some dangerous things about what we don't know about the opposition in Syria, which I think again underscores the question of whether we should be providing weaponry to the opposition. We have learned these lessons in the past. Specifically, what happens when you start to fund an insurgency where you don't know who the actors and what their ideologies are? That is what we learned in Afghanistan.
Bates: So Jerry, is Louay Safi an American?
Gordon: He's a dual citizen of Syria and America. He was invited by the U.S. Army to lecture the command structure and the troops about ‘the religion of peace’ called Islam at Fort Hood. This was just after the infamous massacre by Major Nadal Hasan.
Bates: Wow. Jonathan, what is happening with Hamas and the PLO? Is there any connection to those terrorist organizations?
Schanzer: Well, we're now seeing a reconciliation dance that has actually been going on for quite some time. We talked before on this program about Hamas and Fatah engaging in overt warfare in 2007. There was a Civil War in 2007 that ended up leaving Hamas in control of the Gaza Strip and the West Bank in control of Fatah. We have had this ongoing tension over the last five years. We have had various actors from the Arab and Muslim world trying to get these two back together again because it looks terrible that the Palestinians are killing one another while they try to blame Israel for all of their ills. Over the last five years, it did not work out to establish a unity government, however, that has changed very recently. It now appears that there may be a possible reconciliation taking place. You have the involvement of the Jordanians and you have the involvement of the Qatari government. There appears to be broad support among some elements within the Hamas faction and the leadership of the PLO that the two will come together and form a unity government and ultimately hold elections. We don't know when the latter might occur. Initially they were scheduled for May. I still don't think that is going to happen, and I'm still not entirely sure that the unity deal will go through. However, what is driving this is a very interesting upshot of the Arab Spring. This could be one more potential silver lining. Hamas is in complete disarray. Hamas is collapsing on itself. A lot of this has to do with the sanctions that we have imposed on Iran. Iran used to be the primary patron for Hamas. The Islamic Republic no longer has the hundreds of millions of dollars that they could supply to the terrorist organization, and so the spigot has run dry. Hamas is now looking for new financial partners. We have heard that Qatar could be one possible source. Turkey could be another. Nonetheless this could be good news because anybody else would appear to be more moderate in comparison to Iran. Given the turmoil and the troubles in Syria that Hamas is now enduring, they also need to look for a new headquarters. They had been based in Damascus. With over 7,000 people killed in Syria, it is very hard for Hamas to maintain this perception that it is an Islamic organization fighting for justice for Muslims. They have had to depart Damascus. As a result Hamas, has had to leave the Iranian axis. Quite bluntly, they are homeless and penniless. In my view, the discussion here about unity with Fatah is one that was born of necessity where Hamas sees this as a matter of survival. I wrote a piece for The Weekly Standard several weeks ago. The headline was, “Hamas for Sale” and I still believe that's true. I believe that Hamas' tactics, its alliances with other Palestinian groups, the way that it operates on the world stage, will be determined by whoever decides to take it in next, and so that may be an opportunity. Of course there is still a lot to be worried about. It could be that Turkey decides to sponsor Hamas and allow it to continue carrying out suicide bombings and firing rockets at Israel. At the same time, you may find that it has some moderating influences. Now there is one more crucial difference. A lot of people are going to say well these developments prove that Hamas is moderate. Nothing can be further from the truth. If you look at the ideology of the people who make up that group, they are radical Jihadists. There is no question about the founding principles that are in their Charter. There is no question that they are still a radical organization. However, given the recent developments we have discussed, Hamas may need to temper their tactics and their strategy. They may need to accept non-violence because that is what is thrust upon them. However, don't think for a second that this organization is committed to peace or non-violence with Israel.
Bates: The organization is very much a pawn in the greater conflict and continuing with that chess analogy, the Middle East is very much a chessboard and you have to think several moves ahead. Do you see Syria being a key to perhaps checkmating Iran? They are such strong allies.
Schanzer: I do. I absolutely see Syria as being a linchpin to much that is going to happen next. If Syria falls, just remember that Syria is a proxy for Iran in many ways. It serves as a logistical go-between for Hezbollah and for Hamas. To see the Assad regime collapse would basically be the equivalent of kicking out the ankle of the Iranian regime. It is not to say that Iran would fall, but certainly it would be a blow to Iran's attempts to project its Hegemony throughout the region. It would be losing a key ally in the region. However, even more than that, you have to step back and look at the broader picture. I think the fall of the Assad regime in Syria could potentially spark a new uprising in Iran. In other words, the people of Iran are watching Syria very closely and wondering. If it comes to pass that Assad falls, it will be despite everything that Iran tried to do to maintain Assad in power, and yet was unable to maintain the status quo in Syria. What is to say that they wouldn’t be able to do it in Iran as well? We have parliamentary elections coming up in Iran about a month and a half from now. It will be very interesting to see whether Assad is gone by then and whether the people of Iran begin to mobilize. Of course they were crushed in 2009. They were murdered, they were raped, they were beaten. and tortured, and they all went back into hiding. However, I don't believe for a second that the Green movement is defunct. It is just dormant, waiting for a new opportunity. I believe that the fall of the Assad regime could give them the spark that they need in order to take to the streets yet again.
Gordon: Jon, one last question, do you think this instability in Syria further isolates Sheik Nasrallah and Hezbollah in nearby Lebanon?
Schanzer: Absolutely, the Hezbollah organization has been weakened. It has less money than it did before. This is very clear. We hear from sources in Lebanon that they have been weakened. Hezbollah currently is suffering from questions of corruption. They are retreating. It's not to say that they are still not dangerous. However, I would say that their standing has dropped significantly. With Iran in the penalty box and with Syria nearing collapse, they seem far weaker than they did even six months ago.
Bates: Jonathan Schanzer had to leave us at the bottom of the hour but we do have a colleague of his, Emanuele Ottolenghi, who is a Senior Fellow at the Foundation for Defense of Democracies. Emanuele, welcome back to Your Turn.
Ottolenghi: Thank you for having me.
Bates: Emanuele also wrote a book entitled, The Pasdaran which in Farsi means “the guards” about the Iranian Revolutionary Guards. The Foundation for Defense of Democracies is online at defenddemocracy.org.
Gordon: Emanuele, there has been a lot in the news recently about arguments over whether Iran has reached what Israeli Minister of Defense Barak calls the zone of immunity. That is to say that some action has to be done to prevent Iran from “assembly” of what Israeli Military Intelligence chief Major General Aviv Kochavi said recently was the possibility up to four atomic weapons. What is going on?
Ottolenghi: Look, the Israeli and the American assessments of what constitutes a red line for Iran's nuclear program have differed for quite some time. The reason has to do with the ability in military terms by both countries to prevent Iran from crossing that line. The Israeli military options are much more limited than the American ones. Israel’s ability to stop Iran before it is too late is predicated more on preventing Iran from reaching a nuclear weapons capability, i.e., the ability to assemble it, regardless of whether Iran is making a run for it. Because that in turn is related to the very successful efforts by Iran to make its program less and less vulnerable to a military attack by spreading it around the country, by putting a lot of critical facilities underground and therefore shielding them from the possibility of an Israeli attack. The Americans estimate the red line is somewhere further down the road in terms of Iran being on the threshold of assembling a weapon. For Israel that is way too far because once they see Iran has the capabilities, technology and knowledge to assemble a weapon, a military attack can only set them back for a limited time as far as the Israelis are concerned. The knowledge is already there and it can be reconstituted so you have had these two assessments which have diverged, although now they are somewhat converging. Iran has made very impressive progress as far as we can tell from the reports from the International Atomic Energy Agency (IAEA) when it comes to weaponization, developing all of the different components that once assembled together would make a nuclear weapon. The only thing that they haven't really managed to do all the way is to enrich uranium at the levels needed for weapons grade material. However, since the beginning of the New Year 2012, Iran has begun to transfer its stockpile of low enriched uranium in a facility that is built deep underground in the mountainous area near their holy city of Qom. Once the uranium is all stockpiled in that facility deep underground it will be extremely hard, if not altogether impossible, for Israeli military planners to feel that they have a chance to actually destroy it, if they wish to do so. That is really where the whole concept of the zone of immunity kicks in. We have information from the quarterly reports of the IAEA that Iran has enough low enriched uranium to build four nuclear weapons if they were to enrich it to much higher levels but they haven't started yet to do that. Therefore they have the tools but they haven't really started, walking down that path. Once that stockpile is safely stored under a mountain, at least in so far as the Israelis are concerned the game is over. That is why there has been a much more intense and contentious debate in the public domain about whether a military attack is coming.
Gordon: Why do you think U.S. Secretary of Defense Panetta went out of his way to specify a precise schedule in which the Israelis may undertake an attack?
Ottolenghi: I think first of all there is still some divergence in Washington and in Jerusalem when it comes to what constitutes the red line that the Iranians shouldn't cross. Therefore it may have to do with that divergence. Also I believe that the Administration is still hoping that the right combination of economic pressure through sanctions and readiness to negotiate through the mechanism of the P5+1, the permanent five members of the U.N. Security Council and Germany, is going to eventually deliver a deal. In other words, they are still somewhat wedded to the notion that if enough pain is inflicted upon the Iranian economy the Iranian leadership will come around to a negotiated settlement of the nuclear issue which will take away their ability to build a nuclear weapon. If you look at the world through that prism you certainly do not want in the next few months to see an Israeli military attack that would possibly jeopardize the possibility. If you don't see the Iranian leadership as eventually coming around to the negotiating table with a genuine commitment and willingness to find a compromise then your calculations change dramatically. I think the Obama Administration still believes in the possibility of an agreement, which is where Panetta's and other Administration’s comments come in.
Bates: Emanuele, if we are going to hold off a military attack until they have crossed the red line or have approached the red line, the Obama Administration has made it very clear that there is a red line that they will not allow Iran to cross.
Bates: The question is how are we to know when they are approaching that red line? Our intelligence services have previously been surprised by nuclear tests in other countries. How are we going to know that Iran is close or is it going to be after the testing is done?
Ottolenghi: I don't really have a good answer to that and we will just have to trust the intelligence services to have enough eyes on the ground and eyes in the sky to be able to tell the President with sufficient precision when it's five minutes to midnight. As you pointed out correctly we have been surprised in the past and so why shouldn't we be surprised this time by a regime that has been proven quite skillful and sophisticated in the way it has handled its nuclear program? I think that there are some indicators that should act as triggers for action. One of them would be when Iran completes the transfer of its uranium stockpile to the facility near Qom. Another one would be that Iran somehow decides to expel the IAEA inspectors from the country. That is a signal that something is about to happen. In order to turn the Qom facility into an enrichment facility for highly enriched uranium, the kind of fissile material you need for nuclear weapons, they would have to reconfigure the structure in a pretty obvious way. That facility is under strict supervision by the IAEA. There is 24/7 CCTV coverage of what happens inside that facility so we would know quite quickly that something is afoot. There are a number of things that the regime could do which would be pretty glaring and in your face which would signal that.
Bates: Are there facilities that are not under closed circuit television surveillance that we don't know about?
Ottolenghi: There well may be. We don't know what we don't know. Therefore there may very well be facilities where they can replicate those activities and we are simply not aware of them. I am skeptical about that because the history of the nuclear program in Iran suggests that Western intelligence services have been pretty good at exposing Iranian nuclear facilities. Sometimes it has been thanks to the help of opposition groups. Actually opposition groups may have exposed facilities after being tipped off by Western intelligence services so it's hard to know who's doing what. However, the fact of the matter is we have a pretty good record of having tracked down and exposed their more important facilities in the nuclear program well before the Iranians managed actually to cross critical red lines. It is hard to believe that there are other facilities which are not known and where the regime is actually conducting a parallel program of that significance. I wouldn't rule it out completely, but it seems to me that this is among the more remote possibilities. I believe that it is more likely if the Iranians choose to cross the line they would do it in one of the facilities we are already aware of. It will be harder for them to do it in such a secretive fashion that they don't get detected quickly enough.
Bates: Let me ask you a question Emanuele about the necessity for any air strike at all. The Stuxnet computer virus slowed things down a bit. There have been Iranian nuclear scientists who have been picked off by targeted explosions of unknown origin. Might an air strike not even be necessary?
Ottolenghi: Look, there is also the possibility that this regime will fall and therefore a military strike might become obsolete. None of the above ultimately will derail the nuclear program. They may delay it. They may exact a heavier price. They may complicate things for the regime. In the case specifically of the targeted assassinations of scientists, leaving aside who is doing it, you know there have been overall four or five people who have been assassinated in the last three or four years. These disruptions and assassinations are not insignificant because it certainly highlights how penetrated the nuclear program may be and how leaky it is in terms of sensitive critical information. However, given the sheer number of people involved in this program the death of four or five scientists in the end doesn't derail it. Same for the Stuxnet virus. It has caused some damage. It has caused some delays. Judging by what we know in terms of the progress of the program which we get through the IAEA reports it does not look like this program has actually slowed down significantly. It looks like the Iranians are managing to overcome all of these hurdles. These measures may earn a month, two months, six months but in the end the program is marching towards its goal. I doubt that a military strike will become avoidable unless of course you know the regime bends and bows to international pressure because of economic distress caused by sanctions or because the population for whatever reasons decides to go back to the streets and topple the regime.
Gordon: Emanuele, speaking about economic distress, towards the tail end of 2011 we had the U.S. Congress pass via an amendment to the National Defense Appropriations Act, a new set of sanctions against the Central Bank of Iran. The EU is essentially phasing in sanctions in the form of a moratorium against purchase of Iranian oil. To your knowledge, how effective have the combination of those allegedly stronger sanctions been in causing mayhem inside the Iranian economy?
Ottolenghi: I think that they have aggravated certain trends within the Iranian economy that already existed. Iran's economy is not built to function well in a competitive global economic market. To give you an example of how actually government mismanagement or government decisions as opposed to sanctions have caused mayhem within the Iranian economy, take the issue of protectionist import duties. The Iranian government has decided to dramatically lower import duties in recent years to follow reform recommendations from the IMF. By lowering such duties to nearly zero the net effect given the lack of competitiveness in the Iranian economy has been that Iran today imports a lot of basic commodities which actually it is able to produce on its own such as tea, rice, grain and so forth. Some of these have been caused by Iranian incompetence or mismanagement. Now, the sanctions have accelerated or caused these downward phenomena to spiral. For example, the fact that Iran has been largely cut off from the international financial system through sanctions, sanctions that pushed Iranian banks to the margins, made it very difficult for Iran to trade in dollars and now in Euros as well. All of these things have a share in responsibility for what is happening in Iran today. Just to remind your listeners, we are talking about a very high level of unemployment, spiraling inflation and devaluation of the currency to unprecedented levels. The reality is that the currency of Iran is in free fall. These things have not happened just because sanctions were introduced. However, the sanctions have contributed significantly to making these trends a lot more prominent and dramatic for the Iranian economy.
Gordon: Speaking about importation one of the more dramatic sanctions that the authority already exists for has been the moratorium on delivery of refined distillate petroleum products from offshore refineries. That has yet to be implemented.
Ottolenghi: Well, you know the measures against refined petroleum products and now the embargo which the European Union has approved on Iranian exports of crude oil are not water tight measures. They are not embraced internationally so there will always be an exemption or free rider or somebody ready to profit more at higher risks to circumvent the sanctions. Regardless of the leaky nature of these measures, the fact that there will always be somebody breaking these rules or going around them or ignoring them, they still have had a significant effect on the Iranian economy. First of all, when it comes to the crude oil embargo, which has not been implemented, the price of Iranian oil has been driven down because there is a risk involved in buying Iranian oil. Risks which are political first and foremost. Because of this risk there are fewer countries inclined to buy Iranian oil. All of these elements combined are leading those who are still ready to buy Iranian oil to demand a discount. Now the discount is important because the Iranian economy thrives on oil revenues and its balanced budget is based on an oil price of $85 a barrel.
In short, even if oil sanctions are not followed by the entire international community, they will wreak havoc inside Iran’s economy because some will not buy anymore and those who still buy will demand a discount.
Gordon: Given Iran’s removal from the international oil payment systems, SWIFT, will this further tighten the financial sanctions on its economy?
Ottolenghi: Everything helps. Look, sanctions are not a one-stop shop. They are cumulative measures. It is hard to say which specific measure leads to breaking point because it is their cumulative effect that leads recalcitrant international actors to change their course. So I cannot tell you that shutting Iran outside SWIFT will do the trick. What I can tell you is that without a SWIFT code today, you cannot make a payment of any kind to anyone from bank to bank. With Iran shut off from SWIFT, most payments now will go be cash in a suitcase and barter. Not the ideal way to run an economy.
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